Indiana

Summary Duke Energy has offered demand-side management (DSM) programs since the 1990s. According to the Energy Information Administration, Indiana electric utilities spent $4 million on energy efficiency in 2007, saving 20,653 MWh. Indiana utilities have proposed new energy efficiency efforts in the past two years (2008 and 2009). However, many of these initiatives are still in the negotiation stage. The dockets are in process at the Indiana Utility Regulatory Commission (IURC). Three of Indiana's natural gas utilities conduct energy efficiency programs as well and plan to ramp-up their current portfolios. Duke Energy has proposed implementing its “Save-A-Watt” initiative in Indiana. This process would require converting Indiana’s current DSM rider, a surcharge paid by utility customers, to an energy efficiency rider. The plan is estimated to save ten times the energy and three times the demand that current programs do and to provide significant savings for customers. The IURC did not approve the petition and responded with a request that Duke conduct a collaborative potential study to determine the market for energy efficiency measures in the state. After the request, Duke collaborated with the Indiana Office of Utility Consumer Counselor and the Citizens Action Coalition of Indiana to hire a consultant to investigate the market potential. Duke Energy’s proposal includes revising its integrated resource planning (IRP) process to consider energy efficiency a resource that can be compared with other energy sources. There have been some efforts under a statewide strategic energy plan to identify and explore policy and program options to improve energy efficiency and infrastructure. This strategic plan, "Hoosier Homegrown Energy," was completed in 2006.

Both natural gas and electric utilities in Indiana operate demand-side management and energy efficiency programs. These utilities include Duke Energy, Vectren, Indiana Michigan Power Company, Northern Indiana Public Service Company, Northern Indiana Fuel and Light, and Kokomo Gas and Fuel. While some of these programs have existed for over a decade, they have been relatively small. According to the Energy Information Administration, Indiana utilities reported efficiency program savings of 20,653 MWh in 2007, 0.02% of total retail sales.  

Although Indiana has not taken a strong interest in energy efficiency in the past, this began to change in 2007. Utilities have proposed expanding their programs and setting more ambitious targets. This has led to a series of new dockets at the Indiana Utility Regulatory Commission.

In 2007, the IURC opened a docket concerning Duke Energy’s expanded energy efficiency program, known as the “Save-A-Watt” program. Duke Energy proposed introducing its new PowerShare program, adding incentives and deferring program costs. This docket is still under consideration. The Alliance to Save Energy, ACEEE, and the Energy Future Coalition endorsed this initiative. The program proposes making energy efficiency a high-priority fuel choice in Duke’s operations in Indiana to reduce costs for customers. Duke also proposed creating an incentive mechanism for energy efficiency. The Public Service Commission responded in 2009 with detailed questions about the specifics of the program.

The “Save-A-Watt” program would set a target of reducing retail electricity sales by 1% by 2015 throughout the five-state region served by Duke Energy. This would involve ramping up the program gradually to meet the target in 2015. After 2015, the savings goal would increase by 1% each year.The plan includes a commitment to “all cost-effective energy efficiency” and sets no upper limit on spending.   

Indiana natural gas utilities reported in 2007 that the Indiana Utility Regulatory Commission approved a set of residential programs that year. The scope of these programs was not clearly stated. In general, natural gas programs in Indiana have been small, limited, and often voluntary.

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According to the Energy Information Administration, Indiana electric utilities spent $4 million on energy efficiency in 2007, 0.05% of total spending. These programs are funded via tariffs (a form of customer surcharge).

This year, Indiana was approved for energy efficiency-related funding from the federal economic stimulus. The State Energy Program will receive $68 million, which may fund other programs in addition to efficiency work, and the state will receive $131 million in weatherization assistance.

Between 2004 and 2007, three natural gas utilities (Northern Indiana Public Service Company, Northern Indiana Fuel and Light, and Kokomo Gas and Fuel) spent $850,000 on low-income weatherization. Since 2007, natural gas utilities have also begun funding energy efficiency programs.

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None in place or proposed.

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Indiana Code 8-1-2.5 allows the Indiana Utility Regulatory Commission to approve alternate regulatory plans for Indiana utilities. Duke Energy Indiana currently has a proposed settlement agreement pending before the commission requesting an alternate regulatory plan (Cause No. 43374, filed Aug. 15, 2008). The Southern Indiana Gas Company and Electric Company, doing business as Vectren Energy Delivery of Indiana, was approved for a decoupling mechanism, referred to as the Sales Reconciliation Component, for its gas utility service (Cause No. 43112, approved Aug. 1, 2007). Vectren was also approved for a Reliability Cost and Revenue Adjustment Mechanism in August 2007. Under this mechanism, the company and customers share equally in results above and below the approved $10.5 million target. (Cause No. 43111, Aug. 15, 2007 and Cause Nos. 39453 - DSM and 43406 - DSM4.)

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Indiana statute 8-1-2.5-1 et. Seq. allows for either shared savings or adjusted/bonus return on equity mechanisms as demand-side management incentives. Duke Energy has submitted a proposal for an avoided cost recovery charge for energy efficiency programs. Vectren Energy Indiana, Northern Indiana Public Service Company, and Indianapolis Power and Light have also filed DSM plans requesting performance incentives. All dockets are currently pending.

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Duke Energy’s "Save-A-Watt" proposal includes revising its integrated resource planning process to consider energy efficiency as a resource that can be compared with other energy sources. This proposal has not been approved yet and is the subject of several open dockets (Dockets 43374, 42612, 43306, 43099, 42943 and 43046).

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• Indiana Office of Energy & Defense Development, Hoosier Homegrown Energy: Indiana's Strategic Energy Plan
• Indiana Utility Regulatory Commission
• Database of State Incentives for Renewables and Efficiency (DSIRE)
• IURC News Release Dec 1, 2006: Indiana Utility Regulatory Commission approves Energy Efficiency Program for Vectren

   

Last Updated 09/11/2009

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